Greenspan: Financial Crisis Doesn’t Indict Ayn Rand Theories

The premise that the markets were truly free in the first place is invalid. There are no truly unregulated markets in the US economy. True laissez-faire capitalism has not been attempted. Additionally, the reality is that the government itself was a contributor to the recent crisis. Fannie Mae and Freddie Mac, both pseudo-government agencies delved much further into the lending business than they were originally designed to participate and the government pressure on traditional lending institutions to lend to unworthy borrowers was the tipping point to a seriously flawed mixed-economy. It was most certainly NOT a laissez-faire economy that was in place before, during or after the crisis.

Agreed, mapjo11……labor unions MUST be abolished before they destroy what’s left of the market.

The global economy must have regulations.In AMERICA ,which was not only very prosperous for corporations but for the people also ,we just like the rest of the world saw what happened when we allowed personal value to be the law.The AMERICAN model is based on welfare of the people through wages and benefits from business and prices controlled primarily by supply and demand.However,the last decade,the AMERICAN model has changed to a third world ,trickle down system.Not only were the laws changed to prosper in this global economy but the American values were destroyed.Take our traditional bankruptcy law, which was consumer friendly but was changed to third world standards.As a result ,many Americans became unsuspecting players in a international ponzi scheme which cost them their homes,savings and jobs.These regulations which led to the recession are still in effect and the naive says we should just trust them.I disagree.

During the 50′s through the 70′s, the interests of capital, labor, and consumers were relatively well aligned. No part could do well unless they all did well. In the 80′s through today, capital was given a major boost at the expense of the other groups, so that now, through the investment market, and corporate alignment with government, capital can do quite well with benefiting labor or consumers. Until they are realigned, our economy will continue to be unstable, we will continue to see bubbles, and few people will come out ahead.

Rand was an elitist idiot, imo. She believed that all benefit to society derived from a relatively small pool of intelligent and creative people and that the great unwashed masses leeched off of them. Under capitalism, the reality is that the vast majority work to enrich the elite few, who profit from their exploitation, and are largely prevented from realizing their own goals and ideas. The concentration of wealth in the US is at record levels, with the top 1% controlling over 80% of all wealth. Wages for most (excepting CEOS) have been stagnent since the 70′s, despite record corporate profits and greatly increased worker productivity in the meantime. Whenever those espousing deregulation and “laissez-faire” policies have been in power (the Republicans) this concentration has intensified dramatically. We USED to have unfettered capitalism in the US, and the result was monopolies, unregulated abuse of workers, widespread poverty and intense concentration of wealth. The government stepped in to regulate the natural excesses which occur under such a system, and today we have the right to unionize and not be slaughtered by our employer, a 40 hr work week, a minimum wage, workplace safety and other protections, and the right to compete fairly with those seeking to monopolize the market and drive their competition out. There is a reason the US long ago decided NOT to allow absolute capitalism; because its natural tendency is towards tyranny of the few over the many. The fact is that capitalism and free enterprise are DIAMETRICALLY opposed..in one, the means of production and wealth grow increasingly concentrated in the hands of the very few, while in the other, it becomes increasingly spread out among the majority as they are able to reap the profits of their OWN labors.

I think that the economy should be more controlled to be stable. Free market seems to be like gambling. It is better for countires to countrol the world economy. Otherwise, important people for the world economy may loose the control.

HopeSprings52:”As Greenspan, said in October, 2008, he had made a “mistake” in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that “a flaw in the model … that defines how the world works.”***That’s a pretty big “flaw”! It actually contradicts the entire model. This is not the first time such unfettered capitalism has resulted in such abuses..hardly an aberration. Instead, it appears to be an inherent weakness Greenspan refuses to acknowledge as such, passing it off as some freak accident. He is either being disingenuous of he is blinded by his beliefs. Either way, not a beneficial trait in someone in his position.

Greenspan and Summers stabbed Brooksley Born in the back when she tried to get anti-fraud banking laws on the federal books. Born would wake in a cold sweat in the late 90′s realizing what could happen, and did happen a decade later. Greenspan isn’t the one who should be interviewed now. He’s been discredited.

I hope you dirty statist socialists get exactly what you deserve. I’ll enjoy sitting back, watching it burn, and then watch you all devour yourselves.

Greenspan and Summers strongly advocated deregulation and got it in 1999. Wall Street turned around and burned the house down. Self regulation – in its purest form – fundamentally means get rid of all laws that govern every aspect of our lives. No more prisons. We can police ourselves. The only morality is whether or not you can make a buck doing it. All drugs would be legal – market forces would take care of the problem. There would be no age limits in pornography – after all there would be no age of consent. Any kind of weapon would be legal and could be carried anywhere. What, you cringe at the thought Mr. Greenspan? Well, one rule, law, or regulation imposed on one aspect of society means that you blow a huge hole in your argument. You can’t have it one way for Wall Street and then hold everyone else down. Or, is that what you are truly arguing?

Stephen Romero-Government has a role as defined in the constitution. Nothing more nothing less. Ayn Rand would not be for no government just one that doesn’t follow a corporate fascist model.
Stephen you must realize that we have more regulation on financial markets than ever before, and it didn’t matter. Regulation of interest rates, government guarantees on mortgages, etc. All regulations that created the moral hazard by removing risk from the not-so-free markets.
We of course need Glas-Steigel becuase of the regulations of FDIC insured deposits and fractional reserve banking.

The looters (inflationary Fed, banksters, politicians, etc.) and the moochers (people that choose to get stuff without sweat equity) will bring down this country. Ayn Rand warned about this, and said the industrialist would just sit on the sidelines and watch the whole thing collapse.

OK, I see “hopesprings52″ has the quote down below. Thanks! Can we get more specifics on that?

Regulated capitalism creates a civilization. Unregulated capitalism creates a pack of wolves.

True freedom is in the word “ALL” not in the word some. Capitalism as it is today represents only SOME not ALL. Democracy represents ALL not the favored few. Now tell me there is not a contradiction between Democracy’s freedom and Capitalism’s! That contradiction is what is killing us! See its effects down in Mexico right now where all trust of government and even people has caused an anarchy; all caused by people who don’t seem to know when enough is enough. The richest man in the world lives down there while millions are living even worst off than the people in Haiti after the earthquake. That is the result of capitalism and a government that has given it free reign.
Ayn Rand cared about THE GLORY AND PRIVILEGES OF THE “CREATORS”; well 99% of the world isn’t that way! We live in a world of mediocrity, and we have to let them live too! The disparity growing in this country is the warning sign. we have to try a new system that doesn’t lead to anarchy or tyranny. Come on America, I know you can do it!

JAM-Wealth has to come from somewhere. If not from capitalism than from where. Would you advocate that the Fed print everyone a cool million bucks?
The disparity in the case of the USA is growing because of excessive regulations and inflation. The excessive regulations have moved industries out of the US. We should repeal all minimum wage laws. We should get rid of all government pensions. There are so many things that would make us more competitive. Inflation has transferred wealth from the poor to the rich. The bailouts have been the greatest transfer of wealth from the poor and mid-level folks to the rich. It will hit us soon through inflation.

Huh – Wealth comes from the labor of the masses and always has; what has moved industries out of the US is greed. But the third world slaves are wising up; that is when the true debacle of Capitalism will come about. When the capitalists can no longer pay their slaves pennies for their products — then the whole house of cards built on slavery will fold up! It is coming; you can’t continue to use people as slaves and expect they wouldn’t fight back, and even the greedy poor are beginning to see the light. That’s why we need to reform capitalism and make it responsible to society. It won’t be easy; and it will require a new mindset, one we still have not acquired. Capitalism is not the only way.

Huh- Communism has had a bad effect on economics, and even our government; it has soured all of us on socialism. Socialism is many different things, and has many good points because it is mindful of society. If we combine the good aspects of socialism with the good aspects of Capitalism (free enterprise and true private property) we might get something better. I personally am for Democracy, as our government; if we can use socialism to create a freedom (a responsible freedom) for Capitalism that mimics that of Democracy then we can form a system that will allow Capitalism to allow society to grow instead of preying on it like does now.

I can’t believe you are even discussing Ayn Rand as if she really knew anything.

Almost since the beginning of our country the untrammeled capitalist has worked to destroy small enterprise that could lead to competition. Rand was motivated by a blind personal hatred of communism, to the extent of losing all capability to think rationally. There are far too many examples where capitalists gain wealth, and then try to raise the barrier to entry so that others may not do the same. And THAT is the capitalist way. Look at how Starbucks kills small idiosyncratic coffee shops that actually sell better coffee (often by opening right next to them), or supermarkets killed the ma and pa shops.

We are not a damn democracy, but a republic. I am sick and tired of people, especially the elite ########, saying this. They should know this.

Hi All,
While this discussion of Ayn Rand is interesting (and yes, I HAVE read all her books) It seems this thread misses the whole point… to police, or not to police. And for those of you who read this article, Mr. Greenspan ends by stating “what we need is far more required capital for financial institutions than we’ve had”. Sorry gang – regardless of your point of view on Ayn – Alan said “required” and that equals “policing” – you can’t have requirements and freedom from requirements at the same time. Alan contradicted his “mentor” even while defending her. These Fed financial guys have become experts at polotician speak… they talk and talk, and don’t actually SAY anything.

The ayn rand philosophy of selfishness and greed have been the dominate force in conservative thinking for the past 40 years.
Seeing how conservatives have been the dominate force in our country for 30 of them and looking at the wreckage, I’d say that this fiction author had no place meddling in ideology.
Her ideas were the catalyst for the awful thinking of today with its embrace of ‘me, me and me’ and its rejection of community, helping others and being a united people.
This woman has instill in many of our thinkers of the past 40 years on the conservative side with a thinking that has led to our downfall as a nation.

vwcat -You couldn’t be more wrong.
“The ayn rand philosophy of selfishness and greed have been the dominate force in conservative thinking for the past 40 years.”
No it hasn’t. Corporate fascism has been the system. Rand despised this.
“Seeing how conservatives have been the dominate force in our country for 30 of them and looking at the wreckage, I’d say that this fiction author had no place meddling in ideology.”
These people were not conservatives as they claimed. Bush is one such example.
“Her ideas were the catalyst for the awful thinking of today with its embrace of ‘me, me and me’ and its rejection of community, helping others and being a united people.”
Socialism works as long as you don’t run out of other people’s money. Capitalism has indeed lifted the most out of poverty as opposed to money printing.
“This woman has instill in many of our thinkers of the past 40 years on the conservative side with a thinking that has led to our downfall as a nation.”
You really have no idea what you are talking about. The people that have caused this financial collapse were allowed to do so because of bad government regulations, i.e. interest rate manipulation, Fannie, Freddie. Rand hated all of this central planning garbage. Please read my other posts before posting such nonsense.

Greenspan is lying.
1. Peter Schiff said in a recent videoblog that he received hundreds of e-mails from people like him who saw the crisis coming.
2. Capitalism works. Central planning doesn’t.

I see nothing wrong with some regulation, the problem is how much is too much or how much is too little. The feds require reserves and I want to know where they all were during the financial crisis!

We need to see Peter Schiff go on ABC and talk and maybe Schiff could debate Greenspan that way we can see the other side of the argument that Greenspan was wrong in his policies. Schiff was and is right on the economy and Greenspan has been wrong many times. Put Schiff on ABC he called the economic calamity long before it happened, and exactly how it would happen.

Unregulated markets lead to bubbles. Very good times followed by very bad times. This is the natural cycle. So, regulation done properly hopefully smoothes things out. The problem is the doing it properly part. Some also seem to believe blindly in the mirage that an amoral free market is always in the best interests of a society. It’s not that easy, sorry to burst (another) bubble for you…

Yup. The risk was assuming the financial industry would police itself. We took a risk when we let them burn their foundations by greasing the legislation that allowed for massive deregulation. Yup. We missed the risk alright. We missed the fact that the people that run these enterprises have absolutely nothing but their own short-term interests in mind, to the exclusion of all else, including their own long-term survival.

ABC, get Peter Schiff on this show if you want to have a legitimate and balanced image on this subject. If not you are just propagating ignorance.

Oh my, I guess Greenspan is playing on the idiocy of the common man. However I think he underestimated the common man. We all know he’s a liar and fraud, he knows exactly what he did. Now why doesn’t someone take Peter Schiff up on his offer to debate Greenspan and the truth of the matter will rise like the phoenix.

The level of Greenspan’s dialogue and the national dialogue among policymakers is so dumbed down on the issue of what did or did not cause the collapse and the current recession/depression that its truly laughable. Its like c’mon guys… these guys – greenspan, summers, bernanke – are ivy league and so am I, and they are saying the dumbest stuff– its all platitudes and mistaken generalizations. They know quite well what caused the crisis. Im not saying that knew exactly how everything would play out- every cause and effect that would domino… but they knew the general lay of the land really well. Im not saying you need a 150 IQ to understand why things turned out as they did, but with a 110 – 120 IQ it would be comprehensible enough. Im smiling as i write this, because its so bloody silly… Greenspan given a forum to spew his idiocy, repeat his silly defenses. Its a real shame on the nation that this guy is given a forum to spew this stuff. Also shameful is the fact that he keeps repeating that no one saw this whole thing coming– come on old man, give up the fraud… The sad fact is that you were supposed to be a leader and all kinds of people among the populace whom you were supposed to lead and guide can call you out on this stuff. Do you see the swell of opposition to your inanities? It comes from high and low! Its not scholars who are calling you out on this stuff, its everyone with half a brain because the stuff is just NOT that hard to understand, as Schiff says… you dont have to be a genius.
Tapper, if you want fireworks and you want to advance the world, then have Schiff come on to debate Greenspan. Let Greenspan speak his piece to someone who can answer him in a knowledgeable way. I am sure it will be doing the Maestro a good turn in the sense that history will judge him very severely on this era, and maybe he can own up to it more so than he has managed to so far. History will lay at his feet a good part of the ill that was wrought in these past few years. Greenspan, Bernanke, Summers, Geithner, Bush, Obama, Dodd, Frank, the Republicans and Democrats of this whole era will be judged severely. So he is not alone, though he is certainly foremost among the leaders, the greater of evils, if you will. But hes not alone, and he can make amends to some degree. The country can take a step towards greatness here- with a real debate between Schiff & Greenspan, or it can shy away into the shadows with prosperity and greatness a thing of the past.
Posted by: Jim | April 05, 2010 at 01:47 AM

Get Peter Schiff to debate Alan Greenspan.

ABC have Peter Schiff on, I think he could give Greenspan a little help figuring out where he went wrong :)

“Isn’t it an indictment of Ayn Rand and the view that laissez-faire capitalism can be expected to function properly, that markets can be trusted to police themselves?”
Laissez-faire capitalism means the _complete_ separation of gvt and economy. When have we ever had that?
“Competitive markets” and “democracy” are nonessential to capitalism, which latter is simply the system of private property. And as such, capitalism is the only system consistent with the individual rights of life, liberty, and the pursuit of happiness.
If anything the sins of gvt intervention are routinely laid at the feet of the capitalist element in our mixed economy. Then statists of all stripes cry out for more intervention, leading to more dysfunction.
Truly free markets don’t need to “police themselves.” They just require that everyone be responsible for their financial transactions, and don’t get bailed out by the rest of us, via the gvt.
“And as I argue, what we need is far more required capital for financial institutions than we’ve had.”
I.e. more gvt intervention! Greenspan betrayed his mentor Ayn Rand by taking the Fed chairmanship in the first place, and hasn’t changed his stripes even now.
What a crock, thru and thru. Objectivists anticipated the financial crisis years and decades ago.

The logical error here is the conflation of “laissez-faire capitalism” with “competitive markets”.
History has shown that the two are incompatible.
There is nothing democratic about capitalism, either.

Greenspan left Rand’s philosophy behind years ago. She never would have approved of his easy money policies at the Fed. and indeed probably would not have approved of his even taking the post.
He’s not a Capitalist.

mr tapper,
why don’t you let your audience decide who is telling the truth. a man who is putting his money where his mouth is (peter schiff) or a man who is just taking the money (alan greenspan) from the american people!
bob testa

It has been more than 70 years since the US has had “free-market” capitalism, so it is hardly accurate to blame it for the economic troubles of 2008-2009. Research indicates that it was not the cause of the 1929 crash, either.
It’s about time to get rid of government interference and crony influence, and try real free-market capitalism.
Real free-market capitalism is nothing more than the economic face of democracy, where individuals freely arrive at mutual agreements on what prices and wages they wish to pay and accept.

Hey it would be a good idea to get Peter Schiff, senate candidate, on to rebut some of Greenspan’s babblings…it would be great TV and you guys are all about ratings anyway.

It sounds like Greenspan wants to blame the disaster on group-think instead of misplaced faith in flimsy economic philosophy. That’s what happens when you ask one of the architects. He accepts responsibility for incorrectly assessing the risk, but how could so many people be so dumb? I think it’s a much more likely explanation that once they got the bubble growing and the gravy-train rolling nobody had the guts to step forward and try and rein it in before it crashed. They weren’t incorrectly assessing risk, they were taking on excessive risk. With everything the same why should we expect it to be any different if there’s a next time? Will the next generation of businessmen and investors be so fundamentally different in character? The concept of self-policing free markets is a joke as long as they’re dominated by unchecked Greed.

What is this a joke? USA has laissez-faire capitalism? Since when? The free market can’t police themselves if risk is removed. That is why failure is always an option. It’s keeps the markets regulated. Alan Greenspan is the worst Fed Chairman ever probably. The man is a fraud, and ABC should stop putting this guy on, as he is obviously lying, or doesn’t know what he is talking about.

Get Peter Schiff to debate Alan Greenspan.
Seconded.

You guys have a non-ending train of “government is the solution” talking heads on. I’m sick of the likes of Axelrod, Reich and the like. Please put on a alternate point of view. That doesn’t mean McCain. If you put Schiff on I’ll even wade through your morass of online commercials to watch it multiple times on your web site.

Let Peter Schiff debate Greenspan! It’ll be a lot of fun!

I think the public deserves to hear from one of the “exceptionally adroit” people that Greenspan confesses actually predicted the housing/credit bubble. PETER SCHIFF could offer clear answers on this very important issue. If we don’t collectively reach some honest conclusions on this we are doomed to repeat!

(Prov 14:30 NIV) A heart at peace gives life to the body, but envy rots the bones.
(James 3:16 NIV) For where you have envy and selfish ambition, there you find disorder and every evil practice.
We will never be able to correct any of this until we are able to criticize ourselves first. Every one of us can do more and should have done more. Instead of using words for constructive meaningful argument and legislation, we use words as sticks and stones to break bones. God was there and he is watching right now, and our failure to be able to do the right thing comes from a lack of faith. Religions have been used as a crutch. The young people of today are going to have to decide between entitlements and freedom. God only offers one. Peace is only offered by Him as well. Farming has taught me that even on the worst day, good things still happen. Soon we will all experience this.
As always, Love to all
Lighthouse Dave Peace and Family
From Maui and Haleakala

Mr Greenspan appears stuck in a time warp, considering everything to have been fine before 2008. He selectively ignores his own and the country’s past history of monetary abuse at the root of the problems. The cause of the 95% reduction of value in the US dollar since the formation of the Federal Reserve system can be laid at their doorstep.
Bring on Peter Schiff and challenge the distorted Greenspan analysis.

Please encourage a debate between Peter Schiff and Alan Greensoan.

Bring on Peter Schiff to debate Greenspan. He saw this coming years ago.

The entire concept of centralized banking is against Ayn Rand’s belief in free markets, so Greenspan never represented her thought. The fact that they were associated decades before her death means nothing.

ABC, why don’t you show that you are truly unbiased by arranging this debate which so many of us are requesting. When so many people can see that Greenspan has made not just “a mistake” but a MONUMENTAL error in policy, why do you continue to treat him like some sort of, I don’t know, maestro? Any maestro worth his salt ought to be able to brush his adversaries aside verbally. Why is Greenspan being protected? How is he allowed to get away with outrageous comments like “nobody could have ever seen this coming” in the face of overwhelming media evidence to the contrary. Moreover, how could a channel like ABC sink to the depths of our nation’s politicians and officials and pander to their tune like a puppet? Surely you realize that a Schiff vs Greenspan debate would garner some pretty high ratings for your station if you promote it right? If nothing else do this for your own profit like true capitalists!!

It seems that a lot of people want Peter Schiff to debate Alan Greenspan. Maybe ABC could arrange something. Schiff definitely saw what was coming, and was talking about it years before it happened. Why bother giving Mr. Greenspan more talk time? Give Peter Schiff an interview.

if you’re not going to question any of Greenspan’s BS statements, get someone on there who will… I’d love to see a meeting of Greenspan and Schiff, however we all know Greenspan is far too cowardly to engage in such an event… so at least let someone on who will speak up for capitalism and defend the country that our founding fathers fought for. for example: Peter Schiff, Ron Paul, or Rand Paul.

put Peter Schiff on so we can hear the other side of the story!!!!

Yes, have Peter Schiff on. He is the sanest (and the bravest, for speaking his controversial mind) economist on your entire continent, if not in the world.
Peace, from Sweden ;)

Have Peter Schiff debate Alan Greenspan, then Ben Bernanake.

Mr. Greenspan – Shame on you! I have been watching what you’ve been doing for some time now, and it is obvious that you do not have the interest of the common American people at heart. In addition, your arrogance is obscene, especially in trying to blame others for your errors. I too vote for ABC giving Peter Schiff a chance to voice his opinions. A debate with Greenspan would be even better, tho I doubt Mr. Greenspan would ever consider such an event.

Mr. Greenspan’s actions in manipulating markets reveal a repudiation of Ayn Rand. How can he insist otherwise? Either he is lying to us, or to himself. Let’s hear a voice of reason and integrity for a change. I too vote for Peter Schiff to appear as a guest on This Week.

Have Peter Schiff on ABC and have him debate Alan Greenspan.
Peter Schiff predicted the crisis all along. As he mentions in the videa blog, he along with numerous people predicted the crisis.
Peter has done tremendous service to capitalism by educating the people on different media regarding the crisis and he continues to do so.

Bring Peter Schiff on! He predicted teh crisis on CNBC, CNN, Fox Business… and has written books. He wants to present an alternative viewpoint to Mr Greenspan’s. Bring him on!

I want to see Peter Schiff debating Allen Greenspan! My whole family will watch it. and thousands of people will watch it online.

Bring on Peter Schiff already. I am tired of hearing the same crap spewed on the television networks day after day. Be a real news agency and get the debate going.

Hi,I’m an ordinary folk and I knew housing bubble was about to burst. Let’s Peter Schiff debate Alan Greenspan.

Interest rates were kept at near zero for a long time. How is this attributed to Rand? When markets were supposed to regulate themselves, how can the FED artifically keep the rates low? Faster growth and economy activity would have automatically increased interest rates but were forcibly kept low by FED. Blaming Rand is entirely wrong….